explain financial resources of urban local bodies.
Answers
Answer:
Municipal Corporations and Municipalities raise their own resources from a variety of sources, as provided for in the respective municipal laws. ... Property tax on land and buildings is the most important source of income of most urban local bodies. Other taxes levied by them are advertisement tax, professional tax etc.
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Explanation:
The major sources of receipts/income for the Urban Local Bodies are:
As is clear Muncipalities have different sources of income. Some of these such as tax and non-tax revenue are generated by these bodies themselves. But owing to rapid pace of urbanisation and the need for urban infrastructure development, own revenue generated by municipalities often falls short of their expenditure requirements. Thus, over and above their own revenue, most local bodies depend significantly upon the devolution of resources and grants from the State and Central governments; and borrowings from financial institutions.
As per the Constitution, the Government of India has been making allocations to local bodies through five year plans and finance commissions (Central Finance Commissions, State Finance Commissions). Beginning from the First Five Year Plan allocations have been made to Urban Local Governments for various purposes.
As regards the Central Finance Commissions, which primarily make recommendations on the distribution of tax revenues between the Union and the States, and also amongst the States, the Tenth Finance Commission introduced exclusive grants for rural and urban local governments. Since then various Finance Commissions have given concrete recommendations regarding municipal finances and the criteria for devolution of funds to Urban Local Bodies.
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